NHH calls for cuts in termination fees in 2006

17 Feb 2006

Hungary’s national telecoms regulator the National Telecommunications Office (NHH) has published a four-year strategy document which includes plans to further cut call termination fees before the end of the year, particularly in the wireless market. Mobile fees fell by around 10% in 2005, aiding mobile growth in the country, which reached 9.32 million users at year-end, a cellular penetration of 92.4%. The regulator believes current fees are too high and distort competition, although it has not revealed the level or the extent of the proposed cuts. The NHH considers that high mobile termination rates ‘cause an unjustifiable competitive disadvantage to fixed line operators in the voice transmission market,’ adding that ‘unrealistically high mobile termination fees cause a competitive disadvantage to new players in the market.’ The NHH introduced lower termination fees in 2005, imposing a 10.3% cut on T-Mobile Hungary and Pannon, and a 16% reduction at Vodafone Hungary. The result of such moves reduced the price differences between the three mobile operators by 20%.

The watchdog is also planning to reduce one-off fees levied on local loop unbundling (LLU) and reduce regional pricing differences in the fixed line segment between market leader Magyar Telekom and the other local telecom providers in the first half of 2006. Although the move would be unwelcome to Magyar Telekom, the regulator deems the incumbent is still hindering competition.

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